Deemed IRAs in qualified plans.

• Author: Laffie, Lesli S.
• Position: AICPA Activities

The AICPA Tax Division's Employee Benefits Taxation Technical Resource Panel submitted comments to the IRS on the proposed regulations on deemed IRAs in qualified plans (REG-15730202). While the AICPA believes the regulations are clear, concise and logical and provide sufficient guidance for plan sponsors and their service providers to administer accounts, it had the following specific concerns.

The requirement to establish a separate trust for deemed-IRA contributions appears to exceed the Code's mandates and should be deleted. Qualified plans already are permitted to accept IRA rollovers without the need to establish a separate trust. The AICPA believes that this requirement will unduly complicate plan administration and lead to potentially higher costs for plan sponsors.

For example, the sponsor will need to generate separate trust statements for the plan audit; additional trustee fees will be incurred. This may deter some employers from adding deemed-IRA...